Agriculture is vital to Moldova’seconomy. It accounts for 14 percent of gross domesticproduct (GDP) and employs 25 percent of the labor force;together with agro-processing, it generates more than 20percent of GDP. While the size of the agriculture sector isone of the largest in Europe, it is comparable to othercountries at similar income levels. The sector is also amajor foreign exchange earner, with agro-food productscomprising about 60 percent of merchandise exports. TheGovernment of Moldova (GoM) identifies agriculture as one ofthe main drivers of growth in its 2020 national developmentstrategy. Agriculture in Moldova faces both short-and-longterm challenges. Increasing public spending on agricultureis not an optimal response to these challenges. Instead, tomake the sector more competitive and resilient to shocks,direct budget spending should be reduced in some areas andredesigned or increased in others. Tax expenditures can bestreamlined to make them more efficient, cost effective, and equitable.
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